Objective: The paper studies the changes of hospitalization expense structure under DIP payment mode, to provide support for adjusting hospitalization expense structure and making scientific operation strategy in TCM hospitals. Methods: The change of average cost of hospitalization from the first quarter to the third quarter of 2022 was analyzed by degree of structure variation and grey relational analysis, taking a class A tertiary Chinese hospital in Yangzhou City as an example. Results: The average hospitalization expenses of the patients with medical insurance showed a downward trend. The diagnosis expenses accounted for the highest proportion in the hospitalization expenses, followed by the expenses of western medicine and consumables. The correlation degree between diagnosis fee and hospitalization fee was the highest, followed by western medicine fee and consumable fee, while the correlation degree between TCM treatment fee, comprehensive service fee, Chinese medicine fee and average hospitalization fee increased. Conclusion: The average hospitalization cost is showing a downward trend. We should control the proportion of diagnostic fees and strengthen reasonable inspection and supervision, increase the proportion of comprehensive service expenses, treatment expenses and TCM treatment expenses which reflect the value of medical personnel.